This document contains charts showing trends in the USD:TRY exchange rate, Turkish scrap steel prices relative to Taiwanese imports and Chinese billet prices, the spread between Turkish scrap and rebar prices, and the ratio of Turkish scrap prices to iron ore prices. It analyzes how these trends impact the competitiveness of electric arc furnace steel production in Turkey versus blast furnace production in Asia, and influence Turkish mills' decisions to purchase scrap versus billet.
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Turkish Scrap Price Premium over Taiwanese Imports
Turkish Scrap price premium over Taiwanese Imports*
* Turkey: HMS 1&2 80:20
Taiwanese: HMS 1&2 80:20 (containerised)
Given Taiwanese EAF producers’ proximity to China, containerised scrap import prices are the most sensitive indicator for
the competitiveness of EAF vs BOF production in Asia. A rise in the Turkish scrap premium over Taiwanese scrap
indicates a growing East-West price disconnection.
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Turkish Scrap - Rebar Spread
Turkish Scrap – Rebar Spread*
* Ferrous scrap, HMS 1&2 80:20, Turkish imports (CFR Iskenderun Port)
Steel rebar, Turkey Exports, FOB Turkey
The spread between Turkish scrap imports and rebar exports provides clarity on the margins that mills are producing.
When margins are being squeezed due to uncompetitive scrap prices mills may consider the value of re-rolling billet as an
alternative.
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Chinese Billet - Tangshan Turkish Scrap - HMS 1&2 80:20 Billet - Scrap Spread
Chinese Domestic Tangshan Billet* price premium over Turkish Scrap
*Includes 17% VAT
It is worth comparing Chinese billet prices and Turkish scrap import prices as the two are substitutable products. If scrap
prices rise too high relative to billet (squeezing the conversion margin), Turkish mills can avoid buying and melting scrap
and simply import and re-roll Chinese billet into rebar
5. FE Ratio between Turkish Scrap and 62% Fe Iron Ore Fines (CFR China port)*
*Ratio reflects yield loss adjustment
The ratio measures the value of virgin iron compared to bulk scrap and is therefore a barometer of the cost-
competitiveness between the two steelmaking routes, blast furnace (BOF) and electric arc furnace (EAF). Turkish EAF
producers are sensitive to Asian BOF prices as both compete in the same export markets.
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Turkish Scrap HMS 1&2 80:20 Scrap - Iron Ore Ratio